As my employees do so much for me and work hard every day, I would like them to know the value I provide them in terms of compensation and benefits. Do you have any advice on how to do this in a constructive, positive way?
Hard working employees in a dental office that achieve results are deserving of good pay and fringe benefits. Sometimes the hard work these diligent employees put forth goes unnoticed and unfortunately unappreciated, at times. Get your pencil sharpened and we’ll run through an easy and effective exercise to help everyone understand the total value of the compensation and benefits you provide to your well-deserving team.
First, I recommend using the trailing 12 months of payroll and benefits data. In this way, the information can be examined over a reasonable period of time.
Tabulate the gross salary and/or hourly pay and overtime wages. Include, if any, employer contributions such as Social Security, Medicare taxes paid (FICA), Federal Unemployment Tax (FUTA), State Unemployment Insurance, and any other taxes paid by the employer on behalf of the employee.
Next, include any employer paid benefits such as a bonus or productivity award, continuing education, life insurance premium, health and/or major medical insurance, vision coverage, covered parking slip, health club membership, uniform allowance, child care assistance, and pension and/or profit sharing plan contribution and match (if any). Tabulate at the usual and customary fee that would normally be charged any dental treatment provided to the employee and/or family members as an employee benefit. Subtract any fees paid by the employee for lab or co-payments.
Now, put together the amount of time benefits paid including holiday pay, vacation pay, sick/wellness pay, and any paid time off that was provided to the employee.
If you get the idea, we’re putting together all of the paid compensation and dollar value of the benefits provided the employee. Add these amounts together and put them to the side.
Finally, from payroll records, compile all hours worked by the employee during the 12-month period. Include total hours the employee actually worked, and total hours taken for paid time off, holiday, vacation, etc.
Divide the total compensation and benefits in dollars by the number of hours the employee actually worked. This amount is the effective value of the employee’s hourly pay. It will shock you, so be ready!
The good news here is that the study will demonstrate that excellent employees who put together a hard days work, who get great results from their efforts, are very well paid; rightly so. It may also reveal that employees that are not getting the results you expect may be paid more than they are worth.
Another element to this study is the battle some employers have with employees who come to them and say, “I know a dental office down the street will pay me $14 per hour; I’m only making $10 per hour. You’ll have to match the $14 or I’m heading down the road.”
Holding an employer hostage to supposed better pay is an awful way to negotiate compensation. One solution is to let the person move on down the road and test the water in greener pastures. Another solution to this problem is to prepare and present the compensation and benefits summary described in this article. If the amounts are different, consider what next steps to take. Be careful; since this subject has come up with one employee, chances are, it will come up with another.
Alternatively, you may suggest a sit down meeting to discuss what expectations you have that are not being met, or how well the employee is performing and that the compensation is “right along the lines of $14 per hour, all totaled”.
I’d very much like to suggest that for each employee in the office, conduct regular performance reviews and include this compensation and benefits summary to demonstrate pay provided for the work performed. It will assist in discussing how to proceed with pay commensurate with work and results.
From the Author: For an easy to use worksheet for this process, send an e-mail to email@example.com and request an “Annual Compensation Summary”.